Investors Dump Telia Shares
In Response to Sonera Takeover

By

Edited By Hugo Dixon

Updated March 27, 2002 12:01 a.m. ET

The stock market has trashed Telia's all-share takeover of Sonera. Based on Friday's closing prices, the Swedish telecommunications incumbent was offering a 16% premium to its Finnish rival. But since then, Telia's share price has collapsed 9%, which has nearly erased the premium offered. The combined market value of the two companies has fallen 6%, suggesting on the face of things that value is being destroyed.

The deal certainly transfers value from Telia shareholders to Sonera's, but will it destroy value as well?...